What is the California Homemade Food Act?

AB1616 was passed in September and went into effect Jan. 1. The law allows certain low-risk foods, known as cottage foods, to be made in private homes and sold to the public. Individuals who own and run these home-based businesses are known as cottage food operators.

Operators can apply for two permits. Class A allows them to sell directly to consumers, like a bake sale. Class B allows them to sell to a third party, such as a grocery store. The rules are tighter for Class B – operators' kitchens must be inspected annually by whomever gives them a permit. In Orange County, that's the Health Care Agency's environmental health division. Products from both must be clearly labeled, "Made in a home kitchen."

A cottage food is a "non-potentially hazardous food." Potentially hazardous foods include anything with low water activity and a high acid level, as these encourage the growth of dangerous micro-organisms. Essentially, if you have to keep it in the refrigerator, don't plan on selling it.

There's a limit to how much money can be made. In 2013, annual sales cannot exceed $35,000. In 2014, they can't exceed $45,000. In 2015 and in subsequent years, they cannot exceed $50,000. Advertising and transactions made on the Internet are OK but not for shipping the product.

Caron Ory's ingredients for business success come with a pinch of hard-learned personal experience.

When she started Sapere Natural Foods LLC, which produces a sweetener called Eco-BeeCo, she spent $35,000 and took out a second mortgage on her home to pay for the required materials.

"It was absolutely insane, but boy, did that put the fire under me to sell my product," Ory said.

Ory now admits that starting out small is key. But in hindsight, she – and everyone else in her position – didn't have that option.

"So many people had a product and just wanted to bring it to market," Ory said.

In January, the California Homemade Food Act went into effect, significantly reducing the risk for small food-business owners because they can test their product to determine its survival in the market.

Ory, 53, a Fountain Valley resident, now teaches classes on how to start a homemade food business under the law. She has become a leading advocate for the cottage food movement, which has inspired nearly 80 Orange County residents to get cooking.

Ory has taught more than 200 residents how to operate cottage food businesses through classes at Orange Coast Community College. Her six-hour courses cover the basics of the law and starting a homemade food business. She leads her students through entrepreneurial tests, product assessments and proper budgeting techniques.

"It's really made me realize that I'm not a good baker because my students are so creative," Ory said from her home kitchen.

Ory said most of her students take the class with the hopes of one day quitting their day jobs and running fully operational bakeries or other similar businesses. The startup costs are low, and owners have the ability to make up to $35,000 a year.

Operations are regulated by the Orange County Health Care Agency's environmental health division, which is in charge of permitting cottage food operators. The division is working to encourage more entrepreneurs like the ones who take Ory's class and is reaching out to potential operators. When the law went into effect, the division held an educational event in Santa Ana. The event was a success, with standing room only attendance.

The division has a full-time adviser on call to answer questions the community may have about the law. More often than not, though, the people calling just have questions and don't end up opening a business, said Richard Sanchez, director of the environmental health division. He said some people are leery of the inspections required if they want to sell indirectly to consumers, perhaps through a grocery store.

"There are still some people out there who are nervous about the health department coming out and seeing what they're doing," Sanchez said. "But we're not going to be showing up at their homes with our white gloves, going to their kitchen telling them to get a new stove. If you have a regular home kitchen with a fridge that works and you keep it clean, you can do this. It's not very difficult."

Sanchez said he would like to see more people open cottage food businesses because he sees the demand for it.

"There's a very large population interested in locally grown and made products, in this era of mass-produced shipping back and forth," Sanchez said.

Caron Ory, 53, of Fountain Valley created a natural sugar substitute called EcoBeeCo, which she uses in baked goods which she sells out of her home. MACKENZIE REISS, ORANGE COUNTY REGISTER
Caron Ory, 53, of Fountain Valley created a natural sugar substitute called EcoBeeCo, which she uses in baked goods which she sells out of her home. MACKENZIE REISS, ORANGE COUNTY REGISTER
Caron Ory, 53, of Fountain Valley invented a natural sugar substitute and is teaching others in Orange County how to start their own food businesses from home. MACKENZIE REISS, ORANGE COUNTY REGISTER
Caron Ory, 53, started her own home cooking business and is teaching others how to do the same, in accordance with the Cottage Food Act. MACKENZIE REISS, ORANGE COUNTY REGISTER
Caron Ory, 53, uses the sugar substitute, EcoBeeCo, that she invented when baking cookies and other treats at home. MACKENZIE REISS, ORANGE COUNTY REGISTER
Jessica Serrano, owner of Bocconi Cakes, rounds cake balls and places them onto a baking sheet. MELINA PIZANO, ORANGE COUNTY REGISTER
Louise Sandy owns and operates the Cottage Food business, Louise Sandy Baking from her Newport Beach home. COURTESY OF LOUISE SANDY
Antonio Meade Jr. is the owner and mastermind behind TnT Gourmet Treats. COURTESY ANTONIO MEADE JR.

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